Buying your first home is both an incredibly exciting and overly nerve-wracking experience. It is a buying decision unlike anything you would have been involved with up until that point and it is easy to get overwhelmed by the experience. Helping first home buyers go through this process is one of my favourite parts of the mortgage business so I thought I would share some quick hints and tips on how to navigate the confusing waters of buying your first home.
PLAN YOUR HOME LOAN BUDGET
When you begin looking at your first home it is easy to get caught up in the excitement of the process and begin looking at palatial estates on the water. Make sure you run through your budget before you begin looking. What can you comfortably afford from a repayment stand point? Remember that as a home owner there are a lot of extra costs that you wouldn’t have had to worry about previously, like water, rates and maintenance costs.
It is always a good plan to sit down with a mortgage professional and run some calculations on what you could reasonably look at as a borrowing amount. Check if there is anything that you can remove from your spending to free up extra cash, do you really need to be going out to dinner 3 nights a week? Little things like this make a big difference when it comes to saving for a deposit and also paying your mortgage.
SPEAK TO A MORTGAGE BROKER
A mortgage broker is there to help you find the best home loan and deal for your situation. Whether it is your first home loan or your 13th, a mortgage broker will be able to review your situation and recommend a mortgage product that best suits your needs. I know it is tempting to just go to wherever your everyday banking is and get your mortgage from them or even just go to wherever your parents have their mortgage however this is not necessarily going to get you the best deal or product for your needs. Ask your broker if they will look at the offerings from those banks so you can compare them to what else is out there.
As I mentioned above find out what you can borrow and what your repayments will be. Also just because you can borrow a million dollars to buy a house does not mean you should, look at the repayment and the effect it will have on your lifestyle. Do not just jump at the chance to buy Buckingham Palace just because technically you can afford it. Which brings me to my next point…
KNOW YOUR LIMITATIONS
Whatever you do, do not buy what you cannot afford. It is easy to convince yourself that you will only have to struggle for the first couple years and then everything will be easy street once you get that promotion or new job.
What if something was to happen in the meantime, or the promotion never came? You could stand to lose everything. When you are looking at your first home remember to live within your means.
When it comes to Real Estate do not necessarily believe all you are told. There is a lot of misinformation and mortgage myths floating around out there so stay on your toes and ask questions. Make sure you carry out in depth building and pest inspections through a respected company. Do not take the agents word for it that the property is structurally sound or hasn’t got pest issues.
Check what properties in the area have been selling for. If you do your research properly you should be able to make a more informed decision on what you are buying.
APPLY FOR THE FIRST HOME OWNERS GRANT/BUILDING BOOST EARLY
This may sound strange but I would definitely recommend applying for the first home buyers grant as soon as you can. You can lodge your grant application through most lenders, if they are an authorised agent and able to receive it. If you do this it will be processed faster than if you had sent it directly to your relevant State or Territory Revenue Office, the government authority that handles these grants.
In most cases if you do this the grant will be processed by the time of settlement or if you are building, by the time the bank will be paying the first scheduled construction loan payment. If you miss out you can still claim the grant up to 12 months from settlement. A key thing to be aware of with these grants is to know what you are eligible for. For example in Queensland you do not get any funds if you purchase a pre-existing property however you are exempt from paying stamp duty provided you pay less than $500,000 for the property. Again the best thing to do is to check with your local Revenue Office for what you are entitled to, alternately ask your mortgage broker.
TAKE YOUR TIME
This is a big one, I know you’re excited, trust me I’ve been there. I know you can’t wait to start decorating your new home and filling it with your memories. But one of the biggest mistakes you can make when buying any property let alone your first one is to rush into it.
Go through the process, go see multiple houses, talk to multiple agents and read all the information you can find. Which brings me to my final tip.
DON’T BE AFRAID TO ASK FOR HELP
Even if you think you know everything there is to know about buying your first home there is always things to learn. I have worked as both a real estate agent and as a mortgage broker and I still can learn from others about property and mortgages. Talk to your broker, your friends, your parents and everyone in between until you are comfortable with where you are at.
Buying your first home is daunting yes, but it doesn’t have to be a negative experience. This is one of the biggest moments of your life. Let 360 Finance make it easier for you with our highly experienced mortgage team. Call today on 1300 361 360 or fill out a quick quote form above and start the process to buying your first or your fiftieth home today.